409A non-qualified. Executive Privilege. deferred compensation plans. A turnkey retirement planning supplement for select employees

Size: px
Start display at page:

Download "409A non-qualified. Executive Privilege. deferred compensation plans. A turnkey retirement planning supplement for select employees"

Transcription

1 Executive Privilege 409A non-qualified deferred compensation plans A turnkey retirement planning supplement for select employees Products and financial services provided by American United Life Insurance Company a OneAmerica company

2 Two challenges 1 Retirement for key employees Many employers offer qualified plans to help employees save for retirement. While these plans generally provide a sufficient vehicle for most workers to save for retirement, they tend to fall short for highly compensated employees (HCEs). IRS regulations and non-discrimination tests limit the amount of money that HCEs can defer into qualified plans. The chart below illustrates the impact these limits have on the potential for HCEs to replace income at retirement. As salaries rise, the percentage of income that can be deferred falls. The end result is that HCEs are left with an income deficit to fill at retirement. 2 Attracting, retaining and rewarding key employees Employers constantly face the challenge of attracting and retaining key employees. The fact is that top people have many options, and tend to stay where they are appreciated and appropriately rewarded. But such rewards need to be mutually beneficial for employer and employee. In today s competitive economy, employers need to find ways to reward key personnel for performance that satisfies company goals. One solution 409a non-qualified deferred compensation plans 409A plans allow key employees to defer income for retirement and can help employers motivate, reward and retain their top personnel. These plans avoid many of the restrictions inherent in qualified plans, offering the following advantages: n Discriminatory Employer selects the key employees who can participate. n Unlimited Participants can defer an unlimited amount of income, including bonuses. n Pre-tax Participant contributions are made on a pre-tax basis. Retirement deficit for HCEs Income replacement goal at retirement is 80 percent of pre-retirement annual income Qualified plan limits make it difficult for highly compensated employees to adequately replace their income at retirement Graph assumptions: Starting at age 45 and based on 2006 internal revenue code (IRC) limits, maximum 401(k) contributions assuming 3 percent annual salary growth with a 4 percent employer match. Highly compensated employee contributions are capped at 7 percent and subject to the 2006 maximum compensation limit of $220, (k) assets earn 8 percent in all years and generate retirement income, depleting all assets, from age 65 through age 85. Estimated social security retirement benefits assume no future increases in prices or earnings. Source information from the Annual Statistical Supplements to the Social Security Bulletin at

3 Employee/Employer contributions t only can 409A plans accommodate employee deferrals but they can also allow, or be exclusively funded by, employer contributions. The following example illustrates how 409A plans can be structured to uniquely reward employees for their service to the company. n A rewarding example a 409A plan could pay a bonus to select employees at a specified time. The bonus could be subject to a graded vesting schedule or paid only if the employee completes the service. Additionally, the terms of the bonus and vesting schedule can vary by employee. Employer-funded 409A plans give companies considerable flexibility in offering a bonus plan that specifically targets their business needs. Comparison of 401(k) plans and 409A plans Following are some of the fundamental differences between 401(k) plans and 409A plans: Can plan participants be selected on an individual basis? Can participants be limited to a select management group? ¹ ¹ How much can a participant defer? $15,000² limit Can the employer contribute to the plan? Does the employer receive a deduction for contributions? Does the employer receive a deduction when benefits are paid? Are contributions and earnings income taxdeferred to the participant? Are participant benefits protected from employer bankruptcy creditors? Are loans available to plan participants? Is there an income tax penalty for distributions prior to age 59½? 401(k) plans (10%) 409A plans Can participants roll money to an IRA? Who pays the costs of plan administration? Employer Employer 409A plan advantages The Jobs Creation Act of 2004 established Internal Revenue Code 409A, which now governs most nonqualified deferred compensation plans. 409A plans are exempt from the vesting, funding, participation and fiduciary requirements of ERISA as long as they are offered only to a select group of management or highly compensated employees and a one-time statement is filed with the Department of Labor. 409A plan distributions Aside from retirement, death, disability and separation of service, 409A plans can be structured to offer the following unique distribution events without penalty to the participants: 3 n Specified dates Future distribution dates can be specified in the plan. For example, a participant could plan to take a distribution 10 years after his/her enrollment to finance a vacation home. n Specified events Certain specified events can trigger distributions. For example, the plan could specify that distributions be made during years when participants have children attending college. n Change in ownership/control The plan can allow for distribution of all participant assets if the company experiences a change in ownership or control. n Unforeseeable emergency Distributions can be made if participants experience an unforeseeable financial emergency A plans must be limited to a select group of management or highly compensated employees. 2. $15,000 in 2006; participants age 50+ can make additional catch up contributions ($5,000 in 2006) if the plan allows. 3. While non-qualified plans may include a variety of distribution options, IRC 409A has strict rules regarding the timing of making and changing contribution and distribution elections.

4 Employee benefits Employees may defer an unlimited amount of their salaries and/or bonuses on a pre-tax basis, and any earnings attributable to these deferrals are credited on a tax-deferred basis. Below is an example of how much money could be accumulated and taken as retirement income if earnings are set aside pre-tax and allowed to grow tax-deferred in a 409A plan versus after-tax earnings growing in a taxable investment. 409A plan vs. savings plan Assumptions: Age 45, 8% return, 32% tax bracket Annual contributions Total annual contributions Account value at retirement (gross) Account value at retirement (after-tax) Annual retirement income (after-tax) Total retirement income (after-tax) 409A plan $15, , , ,084 66, ,370 Savings plan $10, , , ,875 45, ,270 Period Years 1-20 Years 1-20 Age 65 Age 65 Years Years A plan: Pre-tax earnings, tax-deferred return Savings plan: After-tax earnings, taxable return Employer benefits A 409A plan can be structured to help companies attract, retain and reward key employees. Employers may choose who participates in the plan from among their highly compensated and/or management employees. Employers can elect to match employee deferrals or make discretionary contributions into the plan. Such contributions can be subject to a vesting schedule that may differ for each employee. In fact, employers can discriminate as to who is allowed to participate in the plan as well as to what extent all on an annually discretionary basis. n-qualified deferred compensation 409A plans are non-qualified plans and, therefore, exempt from ERISA vesting, funding, participation and fiduciary requirements. This means that employers may discriminate as to who participates in the plan and to what extent. In order for contributions to be made on a pre-tax basis, however, nonqualified plans must not allow participants to hold a beneficial interest in plan assets. To achieve this, 409A plan benefits must be an unsecured promise to pay from the general assets of the employer. C-corporations are the best candidates for 409A plans because owners as well as key employees can participate. te that while 409A plans may not directly benefit owners of pass-through entities (i.e., S-corporations, LLCs, partnerships, sole proprietors, etc.), they can benefit non-owner employees. Tax-exempt and governmental employers may adopt non-qualified plans, but additional rules apply under IRC 457. Calculations assume contributions are made mid-year on an annual basis.

5 Design considerations Plan structure Deferral plan vs. SERP 409A plans may be structured to accept employee and/or employer contributions, as follows: n Deferral plan allows employees to defer salary and/or bonus compensation into the plan; employees are always 100% vested in the plan benefits based on their own deferrals. n Supplemental executive retirement plan (SERP) allows only employer contributions and generally involves some type of vesting schedule for plan benefits. n Combination plan a combination of a deferral plan and a SERP; for example, an employer may offer to match employee deferrals. Defined benefit vs. defined contribution Another design consideration for 409A plans is whether to offer a defined benefit or defined contribution plan: n Defined benefit plan pays a specific benefit to participants at time of distribution. These plans are usually SERPs and do not specify contribution amounts. Example plan benefit: Each participant receives $500,000 after ten years of plan participation. n Defined contribution plan allows contribution values to accumulate in a hypothetical account for each participant. Participants may be allowed to allocate the value of their hypothetical accounts among a variety of indices based on the performance of selected investment options and/or fixed returns. Plan benefits for each participant are based on the value of his/her hypothetical account at time of distribution. Example plan benefit: Each participant receives a monthly benefit for ten years based on the value of his/her hypothetical account at retirement. Hypothetical account vs. notional asset reserve Defined contribution plans may be structured to base their benefits on account values determined according to the following methods: n Hypothetical account participants may allocate the value of their hypothetical accounts among a variety of indices based on the performance of certain investment options and/ or fixed returns. The employer will often mirror these allocations in the plan s funding vehicle. 4 n tional asset reserve allows the values of assets, like mutual funds or corporate-owned life insurance for each participant, to become the values used to determine the participant s benefits. This is a popular design for plans with a small number of participants and/or employers that do not want the possibility of a discrepancy between hypothetical account and plan funding vehicle values. Rabbi trust An inherent risk of a 409A plan is that an employer might be financially unable to pay plan benefits at time of distribution. To reduce this risk, a Rabbi trust may be adopted to hold plan assets. The trust prevents the employer from using plan assets for purposes other than paying plan benefits, but does not protect the assets from creditors in the event of a bankruptcy. Rabbi trusts are often used in deferral plans but are less frequently used in SERPs. 4. Depending on the funding vehicle and the employer s funding commitment, plan assets and liabilities can become mismatched over time.

6 Taxable assets Unless the employer chooses to informally fund its 409A plan with an asset that is tax-exempt or tax-deferred, any income or gain on plan assets is taxable to the company. This is true even if a Rabbi trust holds the plan assets for the employer. Taxable assets may comprise almost any asset, including equity investments such as mutual funds. The obvious disadvantage to funding a 409A plan with taxable assets is that the company must pay taxes each year on any gain. Additionally, since employee deferrals are pre-tax and build tax-deferred for the participant, this means that the plan assets and liabilities can become increasingly mismatched to the company s disadvantage over time. Funding 409A plans cannot truly be funded like a qualified plan. Qualified plan assets are generally held in trust for the participants. n-qualified plan assets remain a general asset of the employer (or held in a Rabbi trust owned by the employer) and must be subject to the claims of company creditors. There is no requirement to fund a non-qualified plan; however, most companies choose to set money aside to meet future plan liabilities. n-qualified plans are typically informally funded in one of the following three ways. Unfunded Since there are no requirements for a 409A plan sponsor to establish a reserve to pay future benefits, one funding option is to simply pay plan benefits when due from cash flows. This is increasingly the least desirable funding option for employers. Plan benefits are a legitimate debt of the company for which a sufficient reserve should be established. Additionally, the nature of the plan and the often unique relationship between the company and participants typically mandates some type of informal funding. Tax-deferred assets Since 409A plan assets are held as a general asset of the employer, many companies choose to fund these plans with tax-deferred assets. The most common tax-deferred 409A plan funding vehicle is corporate owned life insurance (COLI). COLI not only provides tax-deferral on any gain, but account values can be withdrawn from the policy to pay plan benefits on a first-in first-out (FIFO) basis. This means that at any point in time, an amount equal to the premiums paid can be taken from the policy tax-free. Additionally, any gain can be borrowed from the policy without creating a currently taxable situation. If a COLI policy is held until death, the proceeds are paid to the company tax-free. COLI proceeds can be used to pay participant death benefits, provide key person insurance and/or reimburse the company for the 409A plan costs.

7 Executive Privilege 409A plans Our Executive Privilege 409A program brings together all legal, funding and administrative elements of a non-qualified deferred compensation plan, and consolidates them into one easy-to-establish, turnkey package. Leveraging the widely recognized expertise in employer-sponsored retirement plans of American United Life Insurance Company (AUL), a OneAmerica company, Executive Privilege offers a wide variety of unique features and benefits. Executive Privilege funding vehicle A flexible premium variable universal life (FPVUL) insurance policy serves as the primary funding vehicle for Executive Privilege 409A plans. In addition to providing the inherent tax advantages of life insurance, a FPVUL offers a variety of benefits that make this type of policy well-suited for corporate ownership. administration services. McCamish Systems will prepare a customized fee quote based on the features of the plan. Other steps to installing a plan include: n If desired, an enrollment meeting may be held with prospective participants to review plan features. n Each participant completes a joinder agreement and any related insurance applications. For more information about Executive Privilege, please visit Key person and split dollar arrangements Corporate owned life insurance can be structured to provide multiple benefits to owners and beneficiaries. For non-qualified plans, COLI can serve as the plan s informal funding vehicle and provide life insurance for a variety of needs and beneficiaries. For instance, the policy proceeds could be structured not only to reimburse the employer for all plan costs but provide key person insurance as well. Another option would be to pay a portion of the proceeds to the participant s spouse under a split dollar arrangement. Under such an arrangement, the spouse could receive a benefit equal to what the participant intended to save for retirement if he/she had lived and continued to contribute to the plan. Plan development & administration One of the first steps to installing a 409A plan is the company s adoption of a plan document. A sample plan document is provided but a practicing attorney must generate an executable version. AUL has contracted with McCamish Systems, LLC, a nationally-recognized third party administrator (TPA) in non-qualified plans, to provide plan

8 Solutions for a lifetime About OneAmerica/AUL. OneAmerica Financial Partners, Inc., traces its solid foundation more than 125 years in the insurance and financial services marketplace. Its nationwide network of partner companies and affiliates offers retirement plan products and services; individual life and group insurance; and annuities. Headquartered in Indianapolis, IN, American United Life Insurance Company (AUL) is the founding member of OneAmerica. AUL is licensed and authorized to conduct life insurance business in 49 states and the District of Columbia. Securities offered through OneAmerica Securities, Inc., Member NASD, SIPC, a Registered Investment Advisor, P.O. Box 1984, Indianapolis, IN 46206, (317) , which is a wholly owned subsidiary of American United Life Insurance Company. American United Life Insurance Company a OneAmerica company One American Square, P.O. Box 368 Indianapolis, IN OneAmerica Financial Partners, Inc. All rights reserved. I /26/06

Nonqualified Deferred C ompensation P lans. Prepared by Sentinel Benefits & Financial Group October 13, 2014

Nonqualified Deferred C ompensation P lans. Prepared by Sentinel Benefits & Financial Group October 13, 2014 Nonqualified Deferred C ompensation P lans Prepared by Sentinel Benefits & Financial Group October 13, 2014 2 Nonqualified Deferred Compensation Plans WHAT IS IT? A nonqualified deferred compensation (NQDC)

More information

Non-Qualifi ed Fringe Benefi t Planning

Non-Qualifi ed Fringe Benefi t Planning Employee benefi t packages are increasingly viewed as an important form of compensation. The right mix of salary and other benefits can attract, and keep, top-quality employees. Non-Qualifi ed Fringe Benefi

More information

Non-Qualified Deferred Compensation Plans: What and Why? Presented by: Justin W. Stemple

Non-Qualified Deferred Compensation Plans: What and Why? Presented by: Justin W. Stemple Non-Qualified Deferred Compensation Plans: What and Why? Presented by: Justin W. Stemple Qualified Plans 401(k), 403(b), profit-sharing, and defined benefit plans Broad based participation Limits on contributions

More information

Helping you recruit, reward and retain the best people

Helping you recruit, reward and retain the best people The Nationwide Corporate Incentive Program Plan sponsor guide Helping you recruit, reward and retain the best people NATIONWIDE BUSINESS SOLUTIONS GROUP In this guide, Nationwide assumes that the employer

More information

The single source for all your executive benefit needs. A Primer on. Nonqualified Deferred

The single source for all your executive benefit needs. A Primer on. Nonqualified Deferred M Benefit Solutions The single source for all your executive benefit needs A Primer on Nonqualified Deferred Compensation Plans DISCLOSURE INFORMATION This material is intended for informational purposes

More information

Cash or Deferred 401(k) Plan

Cash or Deferred 401(k) Plan The Basics Any profit sharing or stock bonus plan that meets certain participation requirements of IRC Sec. 40(k) can be a cash or deferred plan. An employee can agree to a salary reduction or to defer

More information

The Business Planning Group Inc. Retirement Planning Guide 2015 Edition

The Business Planning Group Inc. Retirement Planning Guide 2015 Edition 2015 Edition Table of Contents Why you should help your clients set up a Qualified Retirement Plan 3 Overview of Qualified Plans 4 Chart of Qualified Retirement Plan Options 5 Individual Retirement Account

More information

Appendix A: Types of Retirement Plans

Appendix A: Types of Retirement Plans Appendix A: Types of Retirement Plans (Congress periodically changes the applicable dollar amounts, percentages, and employee age requirements for the various retirement plans discussed in this section

More information

IRAs, pensions and other retirement savings vehicles

IRAs, pensions and other retirement savings vehicles from Personal Financial Services IRAs, pensions and other retirement savings vehicles February 27, 2014 In brief Qualified plans and IRAs are an essential part of retirement and tax planning for many individuals.

More information

Qualified Retirement Plans

Qualified Retirement Plans Qualified Retirement Plans A reference guide Put together by the Qualified Plans Resource Group For Financial Professional Use Only. Not for use with the public. Any discussion pertaining to taxes in this

More information

Nonqualified Deferred Compensation Plan Essentials What You Need To Know

Nonqualified Deferred Compensation Plan Essentials What You Need To Know Nonqualified Deferred Compensation Plan Essentials What You Need To Know What is a Nonqualified Deferred Compensation Plan? Nonqualified deferred compensation (NQDC) plans are company-sponsored programs

More information

SIMPLE IRA Plan. Reporting and Disclosure Requirements No annual IRS filing requirement.

SIMPLE IRA Plan. Reporting and Disclosure Requirements No annual IRS filing requirement. SIMPLE IRA Plan A SIMPLE IRA plan provides small employers with a simplified method to contribute toward their employees' and their own retirement savings. Employees may choose to make salary reduction

More information

Business Retirement Plans Choose Wisely

Business Retirement Plans Choose Wisely Business Retirement Plans Choose Wisely Business Retirement Plans BNY Mellon Retirement is here to help you craft the bold solutions that help deliver successful retirement outcomes. Americans are expected

More information

Section 457(b) Plan. What is a Section 457(b) plan? What types of employers can use a Section 457(b) plan? Section 457(b) plans and ERISA

Section 457(b) Plan. What is a Section 457(b) plan? What types of employers can use a Section 457(b) plan? Section 457(b) plans and ERISA Section 457(b) Plan What is a Section 457(b) plan? A Section 457(b) plan is a type of nonqualified deferred compensation plan that certain governmental and tax-exempt organizations can establish for their

More information

Business Life Insurance Strategies Guide

Business Life Insurance Strategies Guide Business Life Insurance Strategies Guide Nationwide Business Solutions Group In this guide, Nationwide assumes that universal or variable universal life insurance is used for each of the strategies, unless

More information

Non-Qualified Deferred Compensation: Overview. Michael E. Morris, AIF, CRPS Director Institutional Consulting Ross, Sinclaire & Associates, LLC

Non-Qualified Deferred Compensation: Overview. Michael E. Morris, AIF, CRPS Director Institutional Consulting Ross, Sinclaire & Associates, LLC Non-Qualified Deferred Compensation: Overview Michael E. Morris, AIF, CRPS Director Institutional Consulting Ross, Sinclaire & Associates, LLC Who is a prospect for non-qualified planning? Private companies

More information

Educational Series. Supplemental Executive Retirement Plan (SERP)

Educational Series. Supplemental Executive Retirement Plan (SERP) Supplemental Executive Retirement Plan (SERP) Supplemental Executive Retirement Plans (SERP) Guide What is a Supplemental Executive Retirement Plan (SERP)? A supplemental executive retirement plan is a

More information

Life Insurance Producer s Guide. Executive Bonus. Using Life Insurance. For Life Insurance Producer Use Only. Not for Use with the Public.

Life Insurance Producer s Guide. Executive Bonus. Using Life Insurance. For Life Insurance Producer Use Only. Not for Use with the Public. Life Insurance Producer s Guide Executive Bonus Using Life Insurance AD-OC-838A For Life Insurance Producer Use Only. Not for Use with the Public. Insurance products are issued by Pacific Life Insurance

More information

It s All About the Business

It s All About the Business It s All About the Business Planning Strategies Integrated with Life Insurance to Help a Business Owner Accomplish Goals for Retirement, Business Perpetuation, Successful Business Transition, and Estate

More information

Executive Compensation Strategies. For Academic, Medical, Research and Cultural Institutions

Executive Compensation Strategies. For Academic, Medical, Research and Cultural Institutions Executive Compensation Strategies For Academic, Medical, Research and Cultural Institutions For institutional investor use only. Not for use with or distribution to the public. TIAA-CREF: A leading provider

More information

Business Owner s Bonus Plan. Producer Guide. For agent/registered representative use only. Not for public distribution.

Business Owner s Bonus Plan. Producer Guide. For agent/registered representative use only. Not for public distribution. Business Owner s Bonus Plan Producer Guide For agent/registered representative use only. Not for public distribution. Business Owner s Bonus Plan Producer Guide The Business Owner s Bonus Plan is a personally

More information

Section 79 Permanent Benefit Plans. Producer Guide. Your future. Made easier. LIFE INSURANCE

Section 79 Permanent Benefit Plans. Producer Guide. Your future. Made easier. LIFE INSURANCE Section 79 Permanent Benefit Plans Producer Guide These materials are not intended to and cannot be used to avoid tax penalties and they were prepared to support the promotion or marketing of the matters

More information

401(k) Overlay Executive Benefit Plan. A Customized Life Insurance Strategy to Help Recruit, Retain and Reward Key Executives

401(k) Overlay Executive Benefit Plan. A Customized Life Insurance Strategy to Help Recruit, Retain and Reward Key Executives INDIVIDUAL LIFE INSURANCE 401(k) Overlay Executive Benefit Plan A Customized Life Insurance Strategy to Help Recruit, Retain and Reward Key Executives INSURANCE PRODUCTS: NOT INSURED BY FDIC OR ANY FEDERAL

More information

NONQUALIFIED DEFERRED COMPENSATION PLANS

NONQUALIFIED DEFERRED COMPENSATION PLANS Business Insurance Producer Marketing Guide NONQUALIFIED DEFERRED COMPENSATION PLANS IFS-A073189 Ed. 07/07 Exp. 07/09 NONQUALIFIED DEFERRED COMPENSATION PLANS Concept Summary Nonqualified Deferred Compensation

More information

Roth 403(b) Contribution Option

Roth 403(b) Contribution Option Roth 403(b) Contribution Option Frequently Asked Questions George Mason University offers a Roth 403(b) contribution option under the George Mason University Tax Deferred Savings Plan (the Plan ). The

More information

Basics of IRAs ING FINANCIAL SOLUTIONS. Your future. Made easier. SM

Basics of IRAs ING FINANCIAL SOLUTIONS. Your future. Made easier. SM Basics of IRAs t FDIC/NCUA Insured t A Deposit Of A Bank t Bank Guaranteed May Lose Value t Insured By Any Federal Government Agency ING FINANCIAL SOLUTIONS Your future. Made easier. SM Traditional IRA

More information

Blueprints for Business. Executive Bonus Arrangements Using Life Insurance Producer Guide. Your future. Made easier. SM LIFE

Blueprints for Business. Executive Bonus Arrangements Using Life Insurance Producer Guide. Your future. Made easier. SM LIFE Blueprints for Business Executive Bonus Arrangements Using Life Insurance Producer Guide These materials are not intended to be used to avoid tax penalties and were prepared to support the promotion or

More information

Protection Now. Income Later.

Protection Now. Income Later. Protection Now. Income Later. Life Insurance Retirement Plan for Women AD-OC-749C What are two problems facing today s woman? 1 2 The Family s Financial Vulnerability. Whether you are part of a two-income

More information

457(b) Deferred Compensation Overview for Governmental and Public School entities

457(b) Deferred Compensation Overview for Governmental and Public School entities 457(b) Deferred Compensation Overview for Governmental and Public School entities Retirement experts agree...having the money you want in your later years requires careful planning now. Plan ahead. How

More information

The Ideal Solution - A 457(f) Plan

The Ideal Solution - A 457(f) Plan Cammack LaRhette s 403(b) Curriculum series provides timely articles to plan sponsors offering qualified 403(b), 401(a) and 457 plans. Qualified plans, such as 403(b) plans, may impose income restrictions

More information

Non-Qualified Deferred Compensation

Non-Qualified Deferred Compensation Non-Qualified Deferred Compensation The Concept Nonqualified deferred compensation is an arrangement employers use to provide retirement income and often death or disability benefits or both to a select

More information

Glossary of Qualified

Glossary of Qualified Glossary of Qualified Retirement Plan Terms 401(k) Plan: A qualified profit sharing or stock bonus plan under which plan participants have an option to put money into the plan or receive the same amount

More information

Executive Bonus Arrangements using Life Insurance. Producer Guide. For agent use only. Not for public distribution.

Executive Bonus Arrangements using Life Insurance. Producer Guide. For agent use only. Not for public distribution. Executive Bonus Arrangements using Life Insurance Producer Guide For agent use only. Not for public distribution. Executive Bonus Arrangements using Life Insurance To remain competitive and profitable,

More information

Retirement Plans. Planning ahead: Understanding your 403(b) retirement plan. Plan Participant Guide

Retirement Plans. Planning ahead: Understanding your 403(b) retirement plan. Plan Participant Guide Retirement Plans Planning ahead: Understanding your 403(b) retirement plan Plan Participant Guide What is a 403(b) plan? The 403(b) is a tax-deferred retirement plan designed to help you invest regularly

More information

Supplemental Executive Retirement Plan. Recruit, Reward and Retain your best employees. Life. your way SM

Supplemental Executive Retirement Plan. Recruit, Reward and Retain your best employees. Life. your way SM Supplemental Executive Retirement Plan Recruit, Reward and Retain your best employees Life. your way SM HOW CAN I recruit, reward and retain KEY EMPLOYEES? CONSIDER A SUPPLEMENTAL EXECUTIVE RETIREMENT

More information

Comparison Chart: Pre-Tax Deferrals, Designated Roth Deferrals, In-Plan Roth Rollovers, & Roth IRAs

Comparison Chart: Pre-Tax Deferrals, Designated Roth Deferrals, In-Plan Roth Rollovers, & Roth IRAs Comparison Chart: Pre-Tax Deferrals, Designated Roth Deferrals, In-Plan Roth Rollovers, & s Caution: Please note that some of the items included on this grid are the result of Lincoln National Corporation

More information

A Selective Executive Retirement Plan

A Selective Executive Retirement Plan A Selective Executive Retirement Plan Since salary alone is often not enough, what can a corporation do to retain its existing key executives and attract new ones? Table of Contents Page Dual Problems

More information

Executive Retirement Arrangements

Executive Retirement Arrangements COMPENSATION COMMITTEE HANDBOOK &A Executive Retirement Arrangements Qualified Retirement Plans A qualified retirement plan is a funded plan for which organizational assets irrevocably have been set aside,

More information

Supplemental 457(b) Plan Guide. A quick reference for governmental plan sponsors

Supplemental 457(b) Plan Guide. A quick reference for governmental plan sponsors Supplemental 457(b) Plan Guide A quick reference for governmental plan sponsors For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Table of Contents Introduction 1 457(b)

More information

PERSI. It s Your Choice to Go Now, Go BIG! Plan Highlights. Learn about your PERSI Choice 401(k) Plan. Ready, Set, Go: the PERSI Base Plan.

PERSI. It s Your Choice to Go Now, Go BIG! Plan Highlights. Learn about your PERSI Choice 401(k) Plan. Ready, Set, Go: the PERSI Base Plan. PERSI PERSI Choice 401(k) Plan It s Your Choice to Go Now, Go BIG! Plan Highlights Learn about your PERSI Choice 401(k) Plan Ready, Set, Go: the PERSI Base Plan The PERSI Base Plan gets you into the game,

More information

Executive Benefits for Nonprofit & Tax-Exempt Organizations

Executive Benefits for Nonprofit & Tax-Exempt Organizations Executive Benefits for Nonprofit & Tax-Exempt Organizations Recruit, Retain, and Reward Your Top Talent with Nonqualified Retirement or Estate Planning Benefits As a nonprofit or tax-exempt organization,

More information

WHICH TYPE OF IRA MAKES THE MOST SENSE FOR YOU?

WHICH TYPE OF IRA MAKES THE MOST SENSE FOR YOU? WHICH TYPE OF IRA MAKES THE MOST SENSE FOR YOU? In 1974, when IRAs were first created, they were rather simple and straightforward. Now, 35 years later, it s challenging to know the best way to save more

More information

A Lesson in Qualified Retirement Plans

A Lesson in Qualified Retirement Plans A Lesson in Qualified Retirement Plans Since salary alone is often not enough to attract and retain valued employees, how can your business use a qualified retirement plan to enhance its employee benefits

More information

The Continuing Significance of Non-Qualified Deferred Compensation. From: Louis Lepore TABLE OF CONTENTS

The Continuing Significance of Non-Qualified Deferred Compensation. From: Louis Lepore TABLE OF CONTENTS THE PLANNER THE MAY 2010 EDITION Volume 2, Issue 5 A monthly newsletter for Accounting, and Financial Professionals with a focusing on Estate Planning, Elder Law, and Special Needs Persons. The Planner

More information

UNIVERSITY OF MISSOURI. Tax-Deferred Investment Plans Tax Deferred Annuity Plan (403b) Deferred Compensation Plan (457b)

UNIVERSITY OF MISSOURI. Tax-Deferred Investment Plans Tax Deferred Annuity Plan (403b) Deferred Compensation Plan (457b) UNIVERSITY OF MISSOURI Tax-Deferred Investment Plans Tax Deferred Annuity Plan (403b) Deferred Compensation Plan (457b) Plan design effective January 1, 2010 This booklet is designed to provide an overview

More information

abc Split-dollar arrangements Business owners At-a-glance Attract and retain key employees with life insurance

abc Split-dollar arrangements Business owners At-a-glance Attract and retain key employees with life insurance Business owners At-a-glance Attract and retain key employees with life insurance arrangements Insurance products are issued by Minnesota Life Insurance Company in all states except New York. In New York,

More information

COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION

COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION 1. EMPLOYEE INFORMATION (Please print) COLLIERS INTERNATIONAL USA, LLC And Affiliated Employers 401(K) Plan DISTRIBUTION ELECTION Name: Address: Social Security No.: Birth Date: City: State: Zip: Termination

More information

New Hanover Regional Medical Center 403(b) and 457(b) Retirement Savings Plans

New Hanover Regional Medical Center 403(b) and 457(b) Retirement Savings Plans New Hanover Regional Medical Center 403(b) and 457(b) Retirement Savings Plans Mutual Fund Safe Harbor Request For Hardship Withdrawal Group ID# 45944003 Group ID# 45944002 1. CLIENT INFORMATION Name:

More information

South Carolina Deferred Compensation Program Features and Highlights

South Carolina Deferred Compensation Program Features and Highlights Retire from work, not life.. South Carolina Deferred Compensation Program Features and Highlights The South Carolina Deferred Compensation Program is a powerful tool to help you reach your retirement dreams.

More information

Personal Income Tax Bulletin 2008-1. IRAs

Personal Income Tax Bulletin 2008-1. IRAs PENNSYLVANIA DEPARTMENT OF REVENUE ISSUED: JANUARY 16, 2008 Section 1. Introduction. 1. FEDERAL TAX PERSPECTIVE. Personal Income Tax Bulletin 2008-1 IRAs When Congress enacted ERISA in 1974 to regulate

More information

403(b) Solutions for YOU

403(b) Solutions for YOU 403(b) Solutions for YOU Enjoy Life and Have a Bright Financial Future! 30 % Life Insurance Company of the Southwest Form No. 5782(0911); LR 10606(1009); Cat. No. 100109 Experience Life We Can Help You

More information

Choosing a Retirement Plan for Your Business

Choosing a Retirement Plan for Your Business january 2014 Choosing a Retirement Plan for Your Business introduction Table of Contents Building Your Retirement Starting and maintaining a retirement plan for your business can be easier than you think

More information

Retirement Planning Guide

Retirement Planning Guide 2016 Retirement Planning Guide IRA ROTH SIMPLE SEP 401(k) 401(a) Life and More Issuers: Integrity Life Insurance Company National Integrity Life Insurance Company Western-Southern Life Assurance Company

More information

Plan Sponsor 401(k) Retirement Plan Analysis

Plan Sponsor 401(k) Retirement Plan Analysis Plan Sponsor 401(k) Retirement Plan Analysis Table of Contents: 3 Controlled Groups & Affiliated Service Groups 4 Plan Design Alternatives 5 401(k) Testing Requirements 6 ADP & ACP Testing 7 Top Heavy

More information

Preparing for Your Retirement: An IRA Review

Preparing for Your Retirement: An IRA Review Preparing for Your Retirement: An IRA Review How much of your earning power will be available for your use when you retire? What will happen to your standard of living when your income ceases at retirement?

More information

Freedom to enjoy tax-free retirement income

Freedom to enjoy tax-free retirement income Tax-efficient retirement income Using life insurance Freedom to enjoy tax-free retirement income 291194 F (9/13) The Protect. Grow. Give. philosophy With life and disability income insurance, you have

More information

USING IRA ASSETS TO ADDRESS YOUR WEALTH TRANSFER GOALS

USING IRA ASSETS TO ADDRESS YOUR WEALTH TRANSFER GOALS U.S. TRUST FIDUCIARY SERVICES FOR MERRILL LYNCH CLIENTS USING IRA ASSETS TO ADDRESS YOUR WEALTH TRANSFER GOALS Trusteed IRAs from U.S. Trust Working together, Merrill Lynch and U.S. Trust bring you the

More information

A. TYPES OF PLAN DISTRIBUTIONS

A. TYPES OF PLAN DISTRIBUTIONS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax on your retirement plan savings in the Plan and contains important information you will

More information

Key Person, Split Dollar & Deferred Compensation Combination. Three Needs One Policy Presentation

Key Person, Split Dollar & Deferred Compensation Combination. Three Needs One Policy Presentation Three Needs One Policy Presentation Does the business identify with the following? The business relies on one or more executives for generating the bulk of the revenue or for acquiring most of the new

More information

ASPPAJournal. ASPPA s Quarterly Journal for Actuaries, Consultants, Administrators and Other Retirement Plan Professionals

ASPPAJournal. ASPPA s Quarterly Journal for Actuaries, Consultants, Administrators and Other Retirement Plan Professionals WINTER 2010 :: SUPPLEMENT ASPPAJournal ASPPA s Quarterly Journal for Actuaries, Consultants, Administrators and Other Retirement Plan Professionals Question/Topic Individual(k) SEP/IRA SIMPLE 401(k) Profit

More information

INDEPENDENCE PLUS CONTRACT SERIES STATEMENT OF ADDITIONAL INFORMATION. FORM N-4 PART B May 2, 2016 TABLE OF CONTENTS

INDEPENDENCE PLUS CONTRACT SERIES STATEMENT OF ADDITIONAL INFORMATION. FORM N-4 PART B May 2, 2016 TABLE OF CONTENTS THE VARIABLE ANNUITY LIFE INSURANCE COMPANY SEPARATE ACCOUNT A UNITS OF INTEREST UNDER GROUP AND INDIVIDUAL FIXED AND VARIABLE DEFERRED ANNUITY CONTRACTS INDEPENDENCE PLUS CONTRACT SERIES STATEMENT OF

More information

Fully Insured Pension Plan

Fully Insured Pension Plan Fully Insured Pension Plan Marketing Guide There are approximately 23 million small businesses in the U.S.* *Small Business Administration: Small Business Trends (sba.gov) The Market for Fully Insured

More information

Nonqualified deferred compensation plans

Nonqualified deferred compensation plans Fixed index universal life insurance (R-2/205) Allianz Life Insurance Company of North America Nonqualified deferred compensation plans A cost-effective way to reward and retain employees Fixed index universal

More information

G Employee Benefits Alert

G Employee Benefits Alert G Employee Benefits Alert August 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 (the Act ) ushers in the most significant

More information

This will depend upon three factors.

This will depend upon three factors. The basics: A SEP provides an employer with a simplified way to make contributions to an employee s individual retirement account or individual retirement annuity. Employer contributions are made directly

More information

Tax-smart ways to save and invest. TIAA-CREF Financial Essentials

Tax-smart ways to save and invest. TIAA-CREF Financial Essentials Tax-smart ways to save and invest TIAA-CREF Financial Essentials Today s agenda: 1. Finding funds for saving 2. Tax law provisions promoting saving 3. TIAA-CREF savings opportunities 4. TIAA-CREF can help

More information

Permanent Benefit Group Life Insurance Under Code Section 79

Permanent Benefit Group Life Insurance Under Code Section 79 Permanent Benefit Group Life Insurance Under Code Section 79 Expanding the Benefits of Group Life Insurance Advantages of Permanent Benefit Group Life Insurance. Giving employees the option to use cash

More information

RETIREMENT PLAN OPTIONS FOR SMALL- TO MID-SIZE BUSINESSES

RETIREMENT PLAN OPTIONS FOR SMALL- TO MID-SIZE BUSINESSES RETIREMENT PLAN OPTIONS FOR SMALL- TO MID-SIZE BUSINESSES David Eisenman HMWC CPAs & Business Advisors Doug Jones Creative Retirement Solutions, LLC NON-QUALIFIED RETIREMENT PLANS SIMPLE AND SEP PLANS

More information

Offers flexible deferrals up to 100% of annual performance bonus and/or stock options gains

Offers flexible deferrals up to 100% of annual performance bonus and/or stock options gains PLAN SUMMARY Please note that the red text indicates optional plan features which vary from company to company based on overall compensation philosophy or personal preferences. Introduction The Standard

More information

Self Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangements

Self Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangements Self Owned Life And Retirement (S.O.L.A.R.) Insurance Arrangements Producer Guide What Are S.O.L.A.R. Insurance Arrangements? The arrangement can be funded through employer contributions, through after-tax

More information

Supplemental Executive Retirement Plans. Producer Guide. For agent/registered representative use only. Not for public distribution.

Supplemental Executive Retirement Plans. Producer Guide. For agent/registered representative use only. Not for public distribution. Supplemental Executive Retirement Plans Producer Guide Supplemental Executive Retirement Plans In today s labor market, it is important to recruit and retain top executive talent to ensure the growth and

More information

The Competitive Edge. Attract, retain and reward top performers in your corporation. Executive Compensation Strategies That Use Life Insurance

The Competitive Edge. Attract, retain and reward top performers in your corporation. Executive Compensation Strategies That Use Life Insurance The Competitive Edge Attract, retain and reward top performers in your corporation Executive Compensation Strategies That Use Life Insurance AD-OC-678C 1 This material is not intended to be used, nor can

More information

Taking the next step. A guide for beneficiaries

Taking the next step. A guide for beneficiaries Taking the next step A guide for beneficiaries TIAA-CREF listening, caring, ready to serve At TIAA-CREF, we ve been helping people build their financial futures for nearly a century. We started out offering

More information

An Easy and Low-Cost Retirement Plan For Your Small Business

An Easy and Low-Cost Retirement Plan For Your Small Business SEP-IRA SEP-IRAs can provide a substantial source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their eligible employees. An Easy and Low-Cost

More information

Tax-exempt organizations are subject to more

Tax-exempt organizations are subject to more Non-Profit Organizations Have Few Options for Deferred Compensation By William L. MacDonald and Bruce Knox William MacDonald and Bruce Knox explain how the new Regulations under Code Sec. 409A impose restrictions

More information

Questions and Answers about the Roth 401(k)

Questions and Answers about the Roth 401(k) THE RETIREMENT GROUP AT MERRILL LYNCH Q A Questions and Answers about the Roth 401(k) How the Roth 401(k) Works Q. What is the Roth 401(k) contribution option? A. The Roth 401(k) contribution option allows

More information

DEFERRED COMPENSATION PROS & CONS GAIN CONTROL. berrydunn.com

DEFERRED COMPENSATION PROS & CONS GAIN CONTROL. berrydunn.com DEFERRED COMPENSATION PROS & CONS berrydunn.com Just what is deferred compensation? Service provider has a legally binding right during the current taxable year to compensation that is (or may be) payable

More information

The Advantages of Supplemental Retirement Savings Accounts

The Advantages of Supplemental Retirement Savings Accounts The Advantages of Supplemental Retirement Savings Accounts A Tax-Sheltered Account, or TSA, enables you to reduce federal income taxes while supplementing your retirement savings. The Program Your Supplemental

More information

Traditional and Roth IRAs

Traditional and Roth IRAs october 2012 Understanding Traditional and Roth IRAs summary An Individual Retirement Account (IRA) is a powerful savings vehicle that can help you meet your financial goals. As shown in the chart on page

More information

The IRA Rollover. Making Sense Out of Your Retirement Plan Distribution

The IRA Rollover. Making Sense Out of Your Retirement Plan Distribution The IRA Rollover Making Sense Out of Your Retirement Plan Distribution Expecting a Distribution? You have been a participant in your employer s retirement plan for a number of years, and you have earned

More information

Why is Life Insurance a Popular Funding Vehicle for Nonqualified Retirement Plans?

Why is Life Insurance a Popular Funding Vehicle for Nonqualified Retirement Plans? Why is Life Insurance a Popular Funding Vehicle for Nonqualified Retirement Plans? By Peter N. Katz, JD, CLU ChFC This article is a sophisticated analysis about the funding of nonqualified retirement plans.

More information

Presented by: David Hayward, CLU, ChFC, FLMI Marketing Consultant

Presented by: David Hayward, CLU, ChFC, FLMI Marketing Consultant Key Person Insurance Presented by: David Hayward, CLU, ChFC, FLMI Marketing Consultant National Life Group is a trade name of National Life Insurance Company, Montpelier, VT, Life Insurance Company of

More information

Non-qualified Deferred Compensation. Producer Guide. Your future. Made easier. SM LIFE

Non-qualified Deferred Compensation. Producer Guide. Your future. Made easier. SM LIFE Non-qualified Deferred Compensation Producer Guide These materials are not intended to be used to avoid tax penalties and were prepared to support the promotion or marketing of the matter addressed in

More information

Moss Adams Introduction to ESOPs

Moss Adams Introduction to ESOPs Moss Adams Introduction to ESOPs Looking for an exit strategy Have you considered an ESOP? Since 1984, we have performed over 2,000 Employee Stock Ownership Plan (ESOP) valuations for companies with as

More information

Executive Bonus Plans

Executive Bonus Plans Executive Bonus Plans Life s Acknowledgements Recruiting, retaining and rewarding key employees can be one of the toughest jobs you ll face as a business owner. Choosing the right benefit plan one that

More information

The Federal Thrift Savings Plan

The Federal Thrift Savings Plan Vertex Wealth Management, LLC Michael J. Aluotto, CRPC President Private Wealth Manager 1325 Franklin Ave., Ste. 335 Garden City, NY 11530 516-294-8200 mjaluotto@1stallied.com www.vertexwm.com The Federal

More information

Payout Guide A GUIDE TO OPTIONS FOR YOUR STATE OF MICHIGAN 401(K) AND 457 PLAN ACCOUNTS. 1-800-748-6128 http://stateofmi.ingplans.

Payout Guide A GUIDE TO OPTIONS FOR YOUR STATE OF MICHIGAN 401(K) AND 457 PLAN ACCOUNTS. 1-800-748-6128 http://stateofmi.ingplans. Payout Guide A GUIDE TO OPTIONS FOR YOUR STATE OF MICHIGAN 401(K) AND 457 PLAN ACCOUNTS 1-800-748-6128 http://stateofmi.ingplans.com State of Michigan 401(k) and 457 Plan Participant: You ve worked hard

More information

ESOP Repurchase Obligation Funding

ESOP Repurchase Obligation Funding FOR BUSINESS OWNERS Employee Stock Ownership Plans ESOP Repurchase Obligation Funding What is your obligation? Repurchase obligation is the liability a company incurs when vested terminated participants

More information

401(k) Plan Executive Summary

401(k) Plan Executive Summary 401(k) Plan Executive Summary January 2016 3000 Lava Ridge Court, Suite 130 Roseville, CA 95661 Tel 916.773.3480 Fax 916.773.3484 6400 Canoga Avenue, Suite 250 Woodland Hills, CA 91367 Tel 818.716.0111

More information

The Basics of Tax Preferred Retirement Programs for Colleges and Universities

The Basics of Tax Preferred Retirement Programs for Colleges and Universities The Basics of Tax Preferred Retirement Programs for Colleges and Universities Central Association of College and University Business Officers Winter Workshop Jeffrey D. Frank Shawna M. Jimenez February

More information

IRA / Retirement Plan Accounts

IRA / Retirement Plan Accounts IRA / Retirement Plan Accounts Retirement plans are tax advantaged savings plans that have been created by the US government to encourage investors to save for their retirement. Some investments selected

More information

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS

SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS SPECIAL TAX NOTICE REGARDING PLAN PAYMENTS This notice explains how you can continue to defer federal income tax options for your distribution from the Plan and contains important information you will

More information

Preparing for Your Retirement: A Tax-Deferred Annuity (TDA) Review

Preparing for Your Retirement: A Tax-Deferred Annuity (TDA) Review Preparing for Your Retirement: A Tax-Deferred Annuity (TDA) Review How much of your earning power will be available for your use when you retire? What will happen to your standard of living when your income

More information

Retirement Plan Contribution Limits and Withdrawal Requirements

Retirement Plan Contribution Limits and Withdrawal Requirements Manning & Napier Advisors, LLC Retirement Plan Contribution Limits and Withdrawal Requirements April 2011 Approved CAG-CM PUB030-R (10/11) Introduction The following report provides general information

More information

28. Retirement Planning 3: Employer-qualified Plans

28. Retirement Planning 3: Employer-qualified Plans 28. Retirement Planning 3: Employer-qualified Plans Introduction Employer-qualified retirement plans, also called employer-sponsored retirement plans, are the second source of income you should consider

More information

Retire from work, not life..

Retire from work, not life.. Retire from work, not life.. Program Features and Highlights The South Carolina Deferred Compensation Program (Program) is a powerful tool to help you reach your retirement dreams. As a supplement to other

More information

Guide to Individual Retirement Accounts. Make a secure retirement yours

Guide to Individual Retirement Accounts. Make a secure retirement yours Guide to Individual Retirement Accounts Make a secure retirement yours Retirement means something different to everyone. Some dream of stopping employment completely and some want to continue working.

More information

Comprehensive Split Dollar

Comprehensive Split Dollar Advanced Markets Client Guide Comprehensive Split Dollar Crafting a plan to meet your needs. John Hancock Life Insurance Company (U.S.A.) (John Hancock) John Hancock Life Insurance Company New York (John

More information

State Life Care Solutions. Products and financial services provided by The State Life Insurance Company a OneAmerica company

State Life Care Solutions. Products and financial services provided by The State Life Insurance Company a OneAmerica company State Life Care Solutions Annuity Care II Products and financial services provided by The State Life Insurance Company a OneAmerica company Not a deposit. Not FDIC insured. Not guaranteed by any bank.

More information

premiere select Rollover IRA Invest in your retirement today.

premiere select Rollover IRA Invest in your retirement today. premiere select Rollover IRA Invest in your retirement today. Leaving your current job can be challenging in any environment. For many of us, it can also be a bit overwhelming. That s why it s comforting

More information